When Accounting for Sales Where the Risk of Non-Collection of Installments

question 100

Multiple Choice

When accounting for sales where the risk of non-collection of installments is high or when there is no reasonable basis for estimating uncollectible accounts,IFRS

• A)requires use of the installment sales method.
• B)permits either the cost recovery or the installment sales method.
• C)takes a more conservative approach than that allowed under U.S.GAAP.
• D)takes a less conservative approach than that allowed under U.S.GAAP.

---

Definitions:

Common Shareholders

Individuals or entities that own common shares in a company, representing ownership stake and usually having voting rights.

Increased Profits

An enhancement in the net income generated by a business, reflecting an improvement in operational efficiency or revenue growth.

Rich Vein of Gold

A metaphor indicating a highly profitable and abundant source or opportunity.

Convertible Preferred Shareholders

Shareholders who own shares that can be converted into a fixed number of common shares, usually at the discretion of the shareholder.